Gap Inc cuts capital spending and hunkers down to survive coronavirus crisis
Apparel retailer Gap Inc has revealed precautionary measures it is taking to bolster its financial flexibility during the coronavirus outbreak.
The measures include drawing down its US$500 million credit facility, suspending this year’s quarterly dividends, reducing capital expenditure this year by $300 million and reviewing all operating expenses to reduce spending.
“We entered 2020 in a strong financial position,” said Gap Inc president and CEO Sonia Syngal. “However, in this time of unprecedented disruption to the retail sector, we are proactively taking the prudent actions to further strengthen our financial liquidity and flexibility.”
The company had declared earlier that its first quarter fiscal year dividend would be delayed until late April depending on the condition of the outbreak, among other factors. Gap will now review its quarterly cash dividend policy as the situation develops.
The firm’s US North American stores are now closed in compliance with actions to slow the spread of the virus, while the firm continues to trade online.
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